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Block Energy to pioneer perforation technology in Georgia

Published: 08:32 11 Dec 2018 GMT

Oil rig
Block will help promote the technology to other exploration and production companies operating within the region

Block Energy Plc (LON:BLOE), the energy company focused on the Republic of Georgia, has signed a service agreement for the provision of downhole perforation technology.

Block said conventional perforation technologies have had mixed success in Georgia so it has opted for this advanced technology, which has a proven record of significantly enhancing recovery rates.

WATCH: Block Energy fully prepped to run its exclusive new tech on two Norio wells

The agreement gives Block exclusive access to the specialist drilling tool throughout eastern Europe, the Caucasus and central Asia. The company will use the technology, which arrived on site at Block's operations in Georgia on December 7, to re-complete up to eight wells at its 100% owned Norio licence, part of an initial work programme targeting an increase in production at the field to 250 bopd (barrels of oil per day) by the end of June 2019.

“This specialist tool is potentially game-changing for Block, offering a reliable and cost-effective alternative to conventional perforating technology, which to date has produced mixed results in Georgia. We look forward to deploying this highly robust and deployable technology with a proven record of generating significant production increases wherever it has been used and are confident it will help us achieve our initial objective of significantly scaling up Norio production to 250 bopd,” said Paul Haywood, a director of Block Energy.

"The agreement supplements our production programme by opening a significant new source of revenue for the company. Block will take the lead in demonstrating the technology's effectiveness and reliability in the field, and so qualify for a 10% net royalty stream flowing from the use of the tool within the region by other operators,” Haywood revealed.

“The proposed joint venture agreement, making us the exclusive provider of the technology throughout the region, will put us in a stronger negotiating position when farming into new opportunities. As reported in our recent operations update (5 December 2018), we have successfully re-entered three wells at Norio and are rigging up a fourth in preparation for the tool to be deployed to the field,” he added.

Shares in Block were unchanged in early deals.

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